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Cancellation of registration deed after receiving notice from incometax department

yeturi lokesh (student) (27 Points)

09 September 2016

The assessee sold land having circle rate of Rs.40 lakhs for Rs.10 lakhs. Now he received a notice from incometax department that Rs.40 lakhs was taken as sale price. Buyer is also suffered income of Rs. 30 lakhs U/s 56 (2). So to avoid taxburden, is it possible to cancel sale deed???

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7 Replies

ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 10 September 2016

Yes , as per income tax law capital gain arise on transfer of capital asset. And sale value shall be consider sale deed value and FMV (fair market value) which ever is higher.
But there is a relief you shall consider as per your sale deed, you must contact with good valuer/ mohori/lawyer.
But registration feea should be bas

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ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 10 September 2016

should be based on Fair market value, which basically be born by buyer.

ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 10 September 2016

I take assumption you as a seller.

yeturi lokesh (student) (27 Points)
Replied 10 September 2016

Thanks for your early response ANKUR TAH , but my specific doubt is that wether cancellation of sale deed after receiveing incometax notice is valid or not??? if valid then what is the procedure for cancellation of sale deed???

ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 10 September 2016

As per my opinion it should be valid if no procedure happens yet.

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saurabh kumar (Tax Consultant) (348 Points)
Replied 10 September 2016

Cancellation of sale deed is possible but for that there should be a mutual consent and a good reason to cancel that.For this you shall have to file a suit in a civil court.

yeturi lokesh (student) (27 Points)
Replied 10 September 2016

As it is an ancestral property, one of the two sons was not signed the sale document. So can we cancel the sale document on this ground???? Is it possible to show this cancellation of sale deed to income tax officer to avoid tax burden of Rs.30 lakhs(Rs.40 L - Rs.10 L) in the hands of buyer and seller? because we are cancelling the sale deed after receiving notice from incometax department.